The Perth Startup Owner's Working Group (also known as Perth Starters) is a group of startup founders who take take a lean approach to their startups and meet regularly (usually weekly) to discuss what they have built-measured-and-learnt or what they are in the process of building-measuring-and-learning about their startups. We also discuss any issues we are confronting, resources we have found or need, or events we have attended or are attending. The group is open to anyone with like interests and actively involved in a lean startup, or just wishing to learn more about lean startups. We include all types of businesses but are mostly web/mobile startups.

Along with reporting on the progress of our startups and, inline with the different approaches mentioned below, we are also working through various lean startup resources to get our startups going. For example, we could just be reporting on what we are building, measuring and learning, working through the "Running Lean" approach with its use of the Lean Canvas, or working through the checklists in "The Startup Owner's Manual" by Steve Blank and Bob Dorf, with its use of the Business Model Canvas. We are, however, definitely a group focussed on progressing our startups, not just talking about them, but searching for that repeatable and scalable business model.

Current Focus: Our current group discussions focus around the "Running Lean" approach by Ash Maurya. We are reading through this book (for details of the book see the link on the Running Lean page) and seeing how we may be able to apply its approach to our startups. Each week we spend some time discussing any general news or events we have attended, then each startup gives a report on what they have built, measured, and/or learnt, and what they plan to do in the next week, then one person leads an informal discussion of a particular aspect (e.g. chapter) of the current focus. Participants are expected to prepare for these discussions.

As you would expect, most of our startups are at different stages in their development. Some are just starting out and searching for a problem and/or solution, others are validating the problem and solution, some already have a product or service and are validating the product/service and the market. Finally, some may be validating their sales process and getting ready to scale. Some are pre-funding, others may have received some funds, and some are not even looking for funding. This is not a problem because we are all keen to share our knowledge and experience and/or learn from others, and especially to encourage and support each other.

We welcome all founders of lean startups no matter what type of business or what stage in development they are. We also welcome social entrepreneurs whose primary aim is to address some social issue and do some social good rather than to necessarily make money or provide a return to investors. If you are interested in participating or just to come along and checkout what we do, please email us at hedteam@hedventures.com. Participants may be asked to sign a Mutual Non-Disclosure Agreement to enable everyone to talk freely about their startups without any concern that the information will be shared or used inappropriately.

We hope to see you at our meetings!

Best regards,

The Perth Starters.

About Startups and Lean Startups

Startups aren't just new businesses. They are a business that has risk in the product / service and/or they business model and they are potentially high growth businesses (that's why they get investor / VC attention). Startups aren't easy. They're an enormous amount of bl&%dy hard work. In fact, they're even worse than that, they are usually a total failure after all that hard work. And if they are to be successful, they don't usually become successful in a weekend, a week, or even a few months, they take many years to get to the point of a successfully running business (unless they're one of the very few lucky ones that rocket to success).

Traditionally founders have mostly taken the "build it and they will come" approach to startups. Preparing a detailed business plan document (based mostly on guess work) and then building their product/service (often in secret and with little consultation with customers). Unfortunately, this approach has led to poor outcomes. At least nine out of every ten startups fail (often because the customers don't come, at least not in the number expected, and the startups very quickly run out of resources, often due to high sales expenditure). In this traditional approach startups were seen as smaller versions of larger companies (with similar job titles and approaches).

In the last decade, however, a new way of thinking about startups has emerged due to the work of Steve Blank (a successful serial entrepreneur now teacher and investor), Eric Ries (a former student of Steve Blanks), and others (like Ash Maurya and Alexander Osterwalder). In this new ay of thinking a startup is not a small version of a large company but rather a temporary organisation searching for a repeatable and scaleable business model. And the approach taken for this search involves a rapid iteration of some form of customer development and agile product/service development that can be represented in the Build-Measure-Learn loop.

The essence of the Lean Startup approach is that startups are about learning (as opposed to building and hoping). The goal for a lean startup is to iterate the Build-Measure-Learn loop as fast as possible (rather than to optimise any particular stage of the loop, e.g. the build of the product/service). To learn about and confirm (or not) all assumptions about all aspects (usually the most riskiest first) of the business model. The build can be a simple textual description of a problem, solution, product, market or similar, a wireframe solution, or as they are known an Minimal Viable Product (MVP). An MVP is the simplest for of something that will enable a particular piece of learning.

The Lean Startup approach somewhat de-emphasises product/service development or, at the very least, raises the importance of another aspects of a startup called "Customer Development." Customer development is a parallel process to product/service development that involves the founders "getting out of the building" literally (or metaphorically by testing their product/service directly with customers) to interact with customers to validate (or not) the assumptions in their business model and product/service. The development of a startup is no-longer based around the development of the product/service but rather around customer development and, in particular, learning.

Through this learning founders aim first to achieve problem-solution fit, that is to validate that there is a significant problem and that their proposed solution addresses that problem. They then aim to achieve product-market fit, that is to validate that there is a large addressable market and their product/service (in its minimalist form) meets the market's requirements. Only then when they have product-market fit, including a version of the product/service and some traction in the market, is the startup really ready to fully test their business model and particularly, their sales processes for the potential to scale. Success at this suggests a startup that is ready to launch and transition into a high growth business.

There are at least three different levels of lean startup (excluding those startups that think of themselves as lean startups but really aren't). They shall be called here the lite, mid-strength and full-strength lean startups. They are distinguished somewhat by how seriously they take the lean startup approach and, in particular, the customer development approach as defined by Steve Blank in his "Four Steps to the Epiphany" book. This is not to say that any of these approach is better or more correct, just to point out the differences. Generally speaking, we can define the three types of lean startups as follows:

1. Lean Startup Lite. These are startups that generally follow the lean startup build-measure-learn approach as espoused by Eric Ries and "get out of the building" but are somewhat low on process and documentation (in the best sense of the words) and thus direction for founders. Click here to learn more about "Lean Startup Lite."

2. Lean Startup Mid-strength. These are startups that follow Ash Maurya's "Running Lean" approach to lean startups and use his somewhat informal process and document their business model with his "Lean Canvas." This approach is somewhat between the lite and full-strength approach. Click her to learn more about "Lean Startup Mid-strength."

3. Lean Startup Full-Strength. These are startups that follow Steve Blank's Customer Development approach (as well as employing Agile Development) and a process and deliverables something like that in his books, particularly "The Startup Owner's Manual." Click here to learn more about "Lean Startup Full-Strength."

Compare these with "Classical Startups" that follow the traditional "build-it-and-they-will-come" approach. Investing time and money in building a product and/or service with little customer validation. Remember that 9 out of 10 of these startups fail. They generally fail not because they couldn't build the product or service but because there was a lack of customers for what they built.

Finally, most startups seek some form of funding, e.g. from friends, family and fools, or angel investors, or venture capital funds. The topic of startup funding is an entire other discussion but what we can say here is that the lean startup approach, and particularly the customer development approach defines a set of criteria to judge how investor ready a startup is. See the discussion on the investment page. Although there is no generally speaking wrong or right time for funding, the customer development approach does fit well with angel investment for customer discovery, Seed Investment for Customer Validation and Series A investment for Customer Creation. Ash Maurya suggests Series A (or at least major funding) after Product-Market Fit and, if necessary, Seed Investment earlier (although at least with some evidence of traction).

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